Most People Estimate the Negative Impact of Losing $1000 Will

question 65

Multiple Choice

Most people estimate the negative impact of losing $1000 will be greater than the positive impact of winning $1000.In reality,people overestimate the negative emotions they expect to experience after such as loss What is the name for this phenomenon

• A) loss aversion
• B) representative heuristic 
• C) unnecessary constraints
• D) trial-and-error

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Definitions:

Payments

Transactions made by a borrower to a lender to repay a loan or to a seller for goods or services.

Compounded Monthly

Describes the frequency at which interest is calculated and added to the principal balance of an investment or loan each month.

Equal Payments

Regularly scheduled payments that are the same in amount over the term of the loan or investment.

Loan

A loan is a sum of money borrowed that is expected to be paid back with interest.